ROGUE BANKS

Automated Teller Machine

Many banks customers in Nigeria will agree with me that we are being robbed of our meager money by these so-called commercial banks which I prefer to call robber banks. Recently the Central Bank of Nigeria (CBN) announced that it had recovered about 6 billion Naira as illegal charges from banks in 2012. If we are to narrate our ordeal in the hands of these banks we have all got bitter story to tell. Unfortunately not many customers pay any attention to these tiny deductions and that is why these robber banks continue their rogue practices.
Over the years I had often wondered how banks make the billions of Naira at the end of the financial year until recently when I had access to the breakdown of the financial records of some banks.
Guaranty Trust Bank just posted boastfully a profit-before-tax of NGN103 billion being the first bank to hit that threshold. A breakdown shows that NGN44.3 billion was derived from fees and commission. In 2011 it made NGN43.5 billion from same charges. Going by these figures, fees and commission accounted for 40% of their profit. Similarly Zenith bank posted profit-before-tax of NGN102 billion in 2012 financial year with fees and commission accounting for NGN50.4 billion(approximately 50% of earnings ). In 2011 the figure was NGN42.2 billion. Access Bank on its part made NGN 28.7billion out of NGN44.8 billion from fees and commission. This translates to 66% of earnings. In summary, the trio of GTB, Zenith Bank and Access Bank made NGN123.4 billion from fees and commission. WOW!!! CORPORATE ROBBERY IN BROAD DAYLIGHT.
It is worrisome the banks which are suppose to be the bastion of investment and the driver of the economy (which should account for most of the profit) have now resorted to a lazy complacent approach of stealing from customers to make huge profit in the name of charges , fees and commission. If this trend is not checked it may well result into banks pooling 99% of profit from fees and commission (Access Bank is already trending that way). These institutions rather than concentrate on the core income-generating activities of banking like investment and loan, they have suddenly become docile and now very comfortable imposing unchecked, clandestine charges on customers who would never complain.
One such avenue is charges for third party withdrawal from ATM which was scrapped recently. The CBN must be commended for impressing it on the Bankers’ Committee to end the unscrupulous thieving on 17th December 2012, a decision hailed by most bank customers but never went down well with many banks if they were to have their way. One branch of Zenith Bank somewhere in Lagos lamented the loss of revenue of up to NGN7 million monthly as the decision came into effect. Imagine the income generated from all their ATM services in all their branches nationwide. The case of Stanbic IBTC was worse; it charges NGN100 for third party withdrawal and NGN70 if you are a customer of the bank. What if 10000, 50000 or 100000 customers were to make such withdrawals daily??
I have been transacting businesses with Access Bank, GTBank, Union Bank, Stanbic IBTC, old Intercontinental bank, Wema Bank, and getting to know their hidden charges is appalling. In my opinion Access Bank is the most discredited. Ever since I opened my account with the bank I have stopped depositing money there. Recently I went through my account details on internet platform and what I saw was reprehensible. It charges NGN100 monthly for account maintenance, NGN1000 annually for account maintenance, and NGN100 monthly for online account access. This means that annually I forfeit NGN3400 for a savings account that is suppose to grow assuming I make no withdrawals. If one millions customers were to be victim of the highly unpopular charges the whooping sum is unimaginable!!! This calculation does not include charges for SMS alert and other sundry transactions.
Another nonsensical charge relates to SMS alert. I cannot decipher why banks still charge NGN10, NGN15 for SMS alert in the era of extremely cheap bulk SMS and where the ceiling charge by NCC for SMS charge between networks is NGN4. Again banks have refused to provide flexibility in SMS alert such as deposit only, withdrawal only, self only transactions, third party transactions only etc. Certainly as an individual I do not want alert if I do the transactions (deposit and withdrawal) myself. Imagine 500,000 transactions daily with SMS charged at NGN 10 or NGN15, the sum is astronomical if computed for one year. It will be thumb up for CBN if it intervenes to reduce SMS alert charge far below internetwork rate. I am aware of this bank trick and so I do not subscribe to their SMS alert; rather I opt-in for e-mail alert which is usually free.
The absurd, annoying bank charges must be tamed before we all resort to the old time method of keeping our monies in boxes and under pillows rather than patronize these institutions that have become corporate robbers. The drive by the CBN to get many Nigerians into banking may be well a mirage as the attitude of these banks does not in any way promote saving culture. In Nigeria a savings account will rather depreciate instead of growing as the customer is subjected to mysterious charges. The banks have forgotten that it is also the same customers’ money that is given out as loan on interest payable to only the banks; the customers do not benefit from the interest generated. WHO WILL BAIL THE CAT? CBN PLEASE COME TO OUR RESCUE.